Peeved Commissioner Peevey hints at CPUC's disarray

The regulators' fixed deal is naked

On May 14, the California Public Utilities Commission (CPUC) held an evidentiary hearing on a deal that would permit Southern California Edison and San Diego Gas & Electric (SDG&E) to sock ratepayers for $3.3 billion over mistakes made by Edison and/or its supplier at the now-shuttered San Onofre nuclear plant.

Video:

May 14 meeting

"I'm not here to answer your goddamn question…"

Negotiations over the settlement took nine months, but the evidentiary hearing lasted only three and a half hours; ratepayers got only 40 minutes to state their case. San Diego media covered the story well, focusing heavily on Michael Peevey, head of the CPUC, shouting at ratepayer advocate Mike Aguirre, "I'm not here to answer your goddamn question. Now shut up! Shut up!"

I was on vacation when all this occurred, but I would like to add my belated interpretation. Peevey, a former lobbyist and president of Edison, was frustrated because, as Aguirre says, "Their case is in complete disarray."

The CPUC, which is supposed to protect ratepayers, only worries about utility profits, and this was evident in the record of that hearing. Peevey was upset because Aguirre had forced Edison's president, Ronald Litzinger, to confess that critical information was not in front of the commission.

For example, Litzinger admitted that there is nothing in the record about Edison's admission that it had determined there were errors in the design of steam generators. Nor, admitted Litzinger, is there anything in the record establishing the sufficiency of the investigation by the parties to the settlement. Litzinger claimed Edison had acted prudently, but the record does not show that, he admitted.

And so it went. It was clear that the CPUC has pathetically inadequate information on which to make a decision. The administrative law judge tried to thwart Aguirre's tough questioning and consistently belittled him. The judge was obviously trying to keep the devastating lack of information out of the hearing.

Edison did not have a license to operate a steam generator without having a license from the Nuclear Regulatory Commission. Edison admitted that but ignored it.

Video:

CPUC meeting, January 8, 2013

"SF CPUC Judge [Darling] Goes Off & Out of Control…"

The adminstrative law judge, Melanie Darling, upbraided Aguirre for misquoting her. He said she had said there was a settlement conference. She claimed she said no such thing. But the accompanying video excerpts, provided by Ray Lutz of Citizens Oversight, shows clearly that the judge said exactly what Aguirre said she had said.

"Her behavior was not as a judge, but as an advocate under the auspices of Peevey," says Aguirre. At one point Darling said Aguirre had no right to ask questions of Peevey and another commissioner, because they were not under oath. But both commissioners did answer the questions — evasively, to be sure — and Aguirre says people do not have to be under oath when asked if something should disqualify them as impartial judges.

I suggest you watch the video excerpts. It is clear this whole matter is fixed. But the case is so flimsy that even the corrupt, anti-consumer CPUC might realize it has to reconsider this rush to judgment.

Oh, yes. Peevey was president of Edison and its parent, Edison International. When he got the job, San Diegans were shocked because he had completely bungled Edison's attempt to take over SDG&E in the early 1990s. But he only lasted fewer than three years in the top job and "retired" in 1993 at the age of 54.

Comments

Welcome Home Don! Missed You! Amazing, no evidence at the evidentiary hearing for settling in favor of corporate stock holder's closed door deals, against humanity, and a plus for them that nonsense judge. What a perfect package. I like Mike's kind of spitfire.

shirleyberan: The CPUC does not like lawyers who are tough lawyers. This is why Aguirre gets turned down for intervenor fees. The CPUC's mandate is to protect consumers from utilities. But it only cares about utility profits -- thus perennially screwing ratepayers. Best, Don Bauder

Murphyjunk: I have done items on Peevey's overseas junkets that were financed by utilities. I don't know how much stock he owns in Edison International. He should be prevented from owning any, but..... After departing Edison after his very short tenure as president, he got involved in several private energy-related projects. I don't know how well he did and I don't know who financed these projects. Best, Don Bauder

One area that needs major improvement is the Like-For-Like replacement criteria, since SCE made a mockery of the NRC by claiming that they were doing a Like-For-Like RSG replacement at San Onofre Nuclear Power Plant when in fact they were making major design changes that resulting in their 4 new RSG failing soon after installation, a situation that placed all of southern California at risk of a nuclear incident and/or nuclear accident!

Here is an industry document that describes most of the changes that they made while bragging that it was done as "Improving Like-For-Like” which was published just weeks before one of the four RSG’s started leaking radioactive core coolant from one of the soon to be discovered unprecedented amount of wear damaged RSG tubes.

BTW: Nobody can claim the article is bias since it was published by Nuclear Engineering International and was published just weeks before Unit 3 started leaking radioactive core coolant in January 2012.…

Many have asked me, "Why SCE went forward with having MHI build and then install the 4 new Replacement Steam Generators (RSG's) knowing that they had design "issues as noted in not one but several SCE documents?

My best guess is that they had to since they had already committed themselves as the Operators that were in charge of the RSGP to the CPUC, the NRC and their shareholders, so if they suddenly had to say, "Ah, guys we think we may nave a small problem or two" they would have set themselves up for even bigger legal accountability issues that could have ended up with SCE being not allowed to replace the OSG, which were getting near their plugging limitation and therefore were not generating as much Energy and/or profits as SCE wanted. Another issue is the use of high burn-up fuel and its effect on the original steam generators and other hardware, which was one of the reasons that SCE wanted to install new RSG since they would have better corrosion resistance since they used a newer alloy for the tubing. I also think that most of the decision makers at SCE did not understand FEI and figured that they could get away with operating the RSG's in such a way as to minimize any potential problems until they could explain them away as being unrelated to their specific design. Remember that Unit 2 was replaced first and was operated with different parameters than Unit 3 for about a year and I bet these same decision makers at SCE were feeling pretty confident that both Unit 2 and Unit 3 would work out OK, that is until Unit 3 started leaking, which then lead to the discovery of all the internal SG tube damage which even the NRC said was unprecedented in the history of the US Nuclear Fleet. This NRC damage assessment was the wake up call for SCE who then shifted into CYA mode, which included coming down hard on any employees that hinted at or even worse provided documentation that these problems were predicted by SCE team members but ignored by those in charge. As SCE tried to regroup as they "studied the problem" they brought in outside experts but only gave them "some" of the data, which I believe was the reason that all their results conflicted with each other, creating a bigger smoke screen for SCE to better hide behind.

CaptD: It certainly appears that Edison went ahead because it didn't want to tell Wall Street it might have a problem. It was putting profits before safety.

In my mind, Edison's putting the blame on Mitsubishi is questionable; Edison owned the majority of the plant, operated it, and made ratepayers cough up money for that operation. That means Edison had ultimate responsibility for making the right decisions. It was Edison's responsibility to be sure that Mitsubishi equipment was correct. Best, Don Bauder

SUMMARY:
In non-engineering terms, the cause of San Onofre Replacement Steam Generator (RSG) debacle was SCE’s in-house design teams erroneous assumption that their four new RSG’s would be identical "enough" to the original San Onofre Steam Generators (SG’s) as manufactured by Combustion Engineering twenty five years prior, in both design and operational function to qualify SCE to make these replacements safely under the NRC’s like for like replacement criteria, instead of having to seek an amendment to the San Onofre Nuclear Power Plant Operating License via the lengthy NRC 10 CFR §50.59 review process which includes public input.

SCE then expanded their basic assumption to justify allowing their own in-house engineering staff to:

1.Develop the RSG design specifications that later proved to be unsafe, causing them to fail soon after being installed.

2.To manage the entire Replacement Steam Generator Project (RSGP), which included selecting Mitsubishi Heavy Industry (MHI) as the most qualified contractor, from a list of SG manufactures. to manufacture their four new RSG’s, even though neither SCE or MHI had any prior experience in building RSG’s anywhere near this size and/or capacity.

NRC Region IV, which is based in Texas, is responsible for overseeing the safe operation of San Onofre. Those NRC staff responsible for reviewing SCE’s design assumptions knew full well that there were significant differences between the OSG and the RSG yet they did not have the technical training to understand how these changes would result in the failure of the RSG’s, so instead of seeking additional input from others within the NRC that did have the required technical expertise, they chose to accept SCE assumptions. This decision by NRC Region IV resulted in compounding the problems at San Onofre because now those tasked with making sure that the SCE RSGP was safe were in fact making their decisions based on SCE’s own assumptions instead of industry proven engineering principles, said another way, the blind were leading the blind…

The result of these assumptions by SCE and NRC Region IV was that, as the NRC Inspection Report (NRC AIT) states, “replacement steam generators were installed at San Onofre with a significant design deficiency, resulting in rapid tube wear of a type never before seen in recirculating steam generators”.

* This is the first part of a much longer article for SoCal ratepayers to help them better understand exactly what went wrong at San Onofre and why they should all demand a full refunds from their Utilities which caused this Multiple Billion Dollar Debacle!

shirleyberan: The answer is rooftop solar. But the utilities fight that because it dents their profits. Politicians in utilities' pockets help thwart this obvious solution. The utilities would rather build solar farms out in the desert, and transport the power at great expense to the metro centers. Then the utilities' profits soar, even though it is a much worse solution than rooftop solar. Best, Don Bauder

What's your latest understanding of the efficiencies of rooftop photovoltaic versus centralized solar thermal? (Solar thermal, to my understanding, would be very tough for individual homes due to the footprint and enabling infrastructure required.) Last I heard when I attended a renewables conference a couple years back was that solar thermal technology was more than twice as efficient at converting photons into electrons, and still improving, while PV had leveled out.

I'm all for distributed energy solutions, and I do feel rooftop solar is an important part of that because it allows households to take control and go green now, in weeks or months rather than years. Solar thermal farms take a lot more planning and permitting (and bickering) to happen.

It's amazing to me that different people can watch the same proceeding and come away with totally different impressions.

Lawyers should be assertive advocates, but in my opinion Aguirre went FAR over the line to aggressive, obnoxious and borderline slanderous. His behavior showed enormous disrespect for the judge, the commissioners and the entire process. The judge showed incredible patience with him in the face of behavior I'm told in any other type of court would have resulted in a contempt citation, sanctions and a fine. Long before he succeeded in baiting Peevey into that outburst, which was clearly his goal, his grandstanding had made a mockery of this entire portion of the proceedings.

I'm sure Peevey regrets his outburst, but the content was appropriate. The proceeding had no provision for Aguirre to question him, let alone go after him so aggressively, thus "I'm not here to answer your questions." Those were the rules for the proceeding and Aguirre was responsible for knowing them, which the judge repeatedly alluded to throughout Aguirre's grandstanding. And the judge had politely told Aguirre on multiple occasions to "stop talking now" and other such warnings when he was (way) out of order. Peevey, no doubt, thought the judge should have told Aguirre to shut up — or compelled him to do so — long before that exchange took place.

I encourage any fair-minded individual to view the entire proceeding for themselves. You can love or hate the CPUC process, the individuals running it, the troubling issues around San Onofre and more. To me, it seemed like 5 seconds of an unfortunate outburst by Peevey after something like 40 minutes of almost non-stop misbehavior by Aguirre.

DocGee: I totally disagree. The CPUC wants those who speak before it to be deferential, in fact, weak. It controls this through its manipulation of intervenor fees. TURN and UCAN get fat intervenor fees for playing ball with the CPUC. Those who please the CPUC get fees; those who don't get nothing.

Aguirre was being a tough lawyer. By getting Litzinger to admit that so much critical information was NOT in the record, Peevey was seeing the secret negotiations that led to the deal breaking down. That is why he went off his rocker.

Over 9 months of meetings to which pro-consumer groups were not invited, the CPUC, TURN, SDG&E and SCE worked out a scheme by which ratepayers would have to cough up $3.3 billion for mistakes made by Edison. Edison shareholders should pay for its management's screwups. But over and over again, the CPUC tries to stick the bill on ratepayers. California permits its utilities to make very fat returns compared with ratepayers in other states.

Any lawyer representing ratepayers deserve to be enraged by the CPUC's anti-consumer behavior. Aguirre knows he won't get intervenor fees as he fights for ratepayers. I expect the whole thing to wind up in court. I have read the transcripts. Aguirre did the job -- making holes in the secret, rigged plot that the CPUC is trying to get through. Best, Don Bauder

I really, really doubt that Peavey "regrets" this, any more than he regrets anything else in his life. If he has regrets it is that Edison didn't pull off the SDGE buyout, and that he lost his job. But, hey, he's been doing just fine since then, or so it would appear.